Former Steel Workers Sue Company For $200 Million

April 24, 1986|by TIM DARRAGH, The Morning Call

A group of former Bethlehem Steel Corp. employees, mostly from Pennsylvania and Maryland, have filed a $200-million lawsuit against the company, charging the company misled them about their retirement benefits and, in effect, forced them to retire.

The suit, filed in U.S. District Court in Maryland, was filed on behalf of 160 former Bethlehem Steel employees. They are asking for $100 million in compensatory damages and $100 million in punitive damages.

Named as defendants in the suit with the company were Donald Trautlein, chairman of the board and former chief executive officer, and Walter F. Williams, Bethlehem Steel president and chief executive officer.

Williams was serving only in his capacity as president during 1982 and 1983, when the employees allege the company broke its contractual agreements with them.

A Bethlehem Steel spokesman said it would be "inappropriate to comment" on the matter.

George B. Levasseur, a Baltimore attorney representing the plaintiffs, said the former employees allege that their problems began around 1980, when the company began heavy layoffs. The suit said the employees were told they were " 'select survivor' employees and could look forward to long careers."

In December 1982, the suit says, the company advised the employees that various benefits would have to be revised and that the revisions would encourage the employees to work past the company's early retirement age. Thus, the employees claim, they acquiesced to benefit reductions.

The suit further says that, in 1984 and 1985, all of the employees were "retired" under circumstances that "amounted in substance to forced terminations." They also charge that they had no choice but to retire because their option to accept layoff with the right to be recalled was useless, since the layoffs would be permanent.

Some of the employees, Levasseur added, would have selected early retirement before 1983, since their benefits they received after they left the company were lower.

"Some people would have retired (in 1982) if they had known they would have been cut two years later," he said.

At least three of the plaintiffs, Levasseur continued, were told improperly that if they returned as hourly employees they would give up their right to receive salaried pensions.

"We feel there's quite a few more than (three)," Levasseur said.

The three counts in the suit allege that the company breached its contractual and fiduciary duties to the employees to their detriment; that Bethlehem Steel "substantial(ly) underfund(ed)" the benefit packages; and that company officials knew the benefit package was underfunded and that further layoffs would be necessary.

Some of the employees from the Baltimore area organized earlier this year to form a "Pension Fairness Committee," which was led by Walter R. Moyer, a former rate-setter and one of the plaintiffs.

Levasseur earlier said the issue is not related to a class-action lawsuit filed in 1984 by retirees nationwide over changes in health-care benefits. An agreement eventually was reached that guaranteed retirees certain levels of life insurance and health benefits for life.